Academic journal article ABA Banking Journal

FICO Score and Frappuccino ... Yes, There's a Difference

Academic journal article ABA Banking Journal

FICO Score and Frappuccino ... Yes, There's a Difference

Article excerpt

High-school graduations are under way across the country and proud parents are watching restless seniors wave their diplomas in triumph. Soon those going off to college, to work, or military service will be walking into your bank and mine to open their first checking account--and apply for that first credit card. Many of them with no clue about financial matters.

This comes at a time when financial education and financial literacy have never been more important. Bankers need to do our part to help young people become financially literate.

A recent survey of college students by Student Monitor LLC reported that nearly half the students with a credit card applied at their bank, and that's "the preferred method of acquiring a credit card," the survey said. College students also make heavy use of ATM cards and debit or check cards. That's good news. But while young people can get a credit card, do they really understand the responsibility that goes along with it? Nearly six out of ten college students surveyed agreed that "financial literacy is more important now that I'm in college."

Yet other surveys tell us that less than half the high school seniors interviewed know the basics of personal finance. As one father of a high-school senior put it, high school and college graduates "don't know the difference between a FICO score and a frappuccino" because it's not part of the curriculum.

That has to change--for the sake of the students and the economy. …

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